January 20, 2023

Customer Service Challenges in Banks and How to Overcome Them

Illustration showing the challenges in Banks and how to overcome them with Chatbots

Table of content

Customer service is the single most important factor in deciding whether a customer will stay with your bank or switch to another. Research suggests that up to 83% of customers could switch their service providers after a bad experience.

This clearly indicates how important it is to offer good customer service if you want to retain your customers. Though it is important, banks still face numerous challenges in serving their customers on a day-to-day basis.

If you fail to meet service standards and customer expectations, they may abandon your services. Moreover, they may also share their bad experiences with their friends and family.

We’re sure you don’t want to lose customers to bad service. So, let’s discuss some of the biggest customer service challenges that banks face and how you can overcome them.

Related article: How Banks Are Using Chatbots To Boost Their Business

Provide a Personalized Experience

Most people see banks as these big, non-human entities that do not care about individual problems of their customers. While the staff at local bank branches might still know most regular customers by name and provide personalized services, doing so via online and mobile banking is the main challenge.

The online and mobile banking apps of most banks are, to a certain extent, standardized and sort of machine-like. For a question that is as simple as “am I eligible for a personal loan?,” you get a whole resource guide about how to find that out, instead of getting a direct answer. People these days are impatient and expect instant answers to such questions.

Banks need to incorporate personalization to cater to the specific needs and preferences of each of their customers. Using some form of artificial intelligence (AI) or machine learning on your website and mobile apps can help you deliver personalized experiences.

Chatbots powered by conversational AI are the simplest way to get started with this as they can meet your customers’ needs and can evolve and grow with each interaction. 

And it’s not just limited to knowing a customer’s name and providing tailored advice. Conversational AI makes it possible to create automated conversational journeys that direct the customer to exactly what they are looking for, providing even greater personalization. We explore this idea further in the next section.

Resolving queries instantly

When it comes to banking, customers often have a myriad of queries that require an instant response. For example, balance inquiries, card statements, card expiry, account upgrades, loan applications, etc.

While this can be solved through home banking, not all customers have the knowledge or resources to access it, resorting to other bank channels to get an answer. 

For their part, customer service executives are often loaded with too many requests and they fail to provide the required attention to each customer. This often leads to bad experiences and delayed responses.

As we mentioned in the previous point, the key is to be able to solve the problem instantly, providing the exact answer the customer needs. To solve this problem, you can use an automated solution such as a chatbot with conversational AI to automate simple, transactional queries. This will not only take the workload off your employees but also allow customers to resolve their queries conversationally and immediately. 

How to achieve this? Through the right integrations that connect your conversational AI bot with your banking stack. 

Long Waiting Times in Customer Services

Another common customer service challenge that banks face is long turnaround service time. Most banks rely on their customer support teams to cater to their customers’ requests and problems.

This may work well for startups that don’t have a big demand, but for most financial companies, it is almost impossible to resolve every customer query instantly.

More often than not, when a customer calls a bank’s customer care number, they have to wait in line to be able to talk to an executive. And, sometimes, the executives need to transfer their call to some specialized department that can handle the query better.

This delay in customer service delivery can cause unpleasant experiences for a lot of customers. And, most customers won’t give you another chance after a bad experience. They might simply switch their bank.

To avoid losing customers due to slow or poor customer service, you should use technology to speed up the process. A digital banking assistant or a conversational AI chatbot can tackle a significant share of customer queries for you. This will free up some time for your customer care executives.

Your executives can use this time to effectively handle complex issues as they no longer need to answer repetitive, mundane questions that can be answered by a chatbot.

A study by Juniper Research concluded that the use of conversational bots in the banking industry could save up to 862 man-hours by 2023. That equates to $7.3 million in operating costs. This could be a great incentive for banks to use bots to provide better customer service. 

Related article: A Complete Guide to Conversational AI for Banking Industry

Limited Channels and Separate Strategies

When we combine all of the customer service challenges for banks mentioned above, it translates into a poor customer experience. Today’s customers are spoilt for choice and don’t think twice before switching service providers, including banks. They expect high-quality service every single time they interact with a bank via any channel.

As such, it has become crucial for banks to provide great customer experiences via all channels and in all instances to keep their customers satisfied. This means that you need to provide a good experience and instantly resolve their problems, regardless of the channel a customer reaches you through.

This is not humanly possible and is too much to ask for, if you rely only on human resources. No matter how well-trained your employees are, there is always scope for error. However, technology can help you achieve higher success rate (if not 100%) in providing consistently good customer experiences across channels.

The use of bots with conversational AI can help you handle online queries via your website or mobile app instantly. As these bots run on preset algorithms, they can help you deliver omnichannel customer service solutions to keep your customers happy.

These chatbots can then forward or redirect complex customer requests to your human executives.

Low Customer Retention

As mentioned earlier, customers can switch to another bank if they don’t get the expected level of service. In fact, most people are more likely to leave a bank due to poor service rather than poor products. That’s why it is crucial for you to meet their expectations if you don’t want to lose them.

As we all know, loyal customers are more profitable for any business and retaining existing customers costs less than acquiring new ones. In fact, existing customers are 50% more likely to try new products and services from the bank than new customers.  

If you want to maintain a profitable business in the long run, you need to focus on customer retention. Providing good customer service is pivotal to achieving that. And you can do this by incorporating technology into your day-to-day service operations.

Conclusion about Customer Services in Banks

These are some of the most prominent customer service challenges that can cause your customers to leave your bank. The good part is that you can overcome a lot of these challenges in the banking industry by leveraging the right technology.

Using conversational AI chatbots, for example, can help you take the load off your customer service team. Your executives can focus on handling more complex queries and improving overall customer experience.

If you are interested in implementing this technology in your customer service, click here now to book a demo.

Are you looking for new ways to improve your CX?

Our customer service solutions powered by conversational AI can help you deliver an efficient, 24/7 experience  to your customers. Get in touch with one of our specialists to further discuss how they can help your business.